The weakened Australian dollar has improved competitiveness of Queensland exports and attractiveness of inward investment.

There are many opportunities in Europe to leverage the Advance Queensland initiative given the strong technology hubs in London, Dublin and Berlin.

Economy

The European Union (EU) represents the largest global economy with US$16.47 trillion GDP in 2016.

Trade

With a population of more than 500 million, the EU accounts for 20% of all global imports and exports.

Australia’s services exports to the EU grew by 20.3% from $8.5bn in 2010-2011 to $10bn in 2014-15 with significant increases in the telecom, computer and information services sector over the same period.

Investment

The EU is Australia’s second largest trading partner and continues as the largest source of foreign direct investment (FDI). In 2015, the EU’s foreign direct investment in Australia totaled $157.6 billion – 21.4 per cent of Australia’s total inwards FDI.

Depite the 52% majority decision to leave the EU announced in June 2016, the UK is the:

the second largest source of inbound FDI to Australia

and is ranked the 5th largest global economy alongside Germany (4th) and France (6th) by 2016 GDP.

Investment/financial services

The EU is one of the world’s largest markets for fund management and is a leading centre for
foreign currency exchange, world trade finance, and hedge fund, sovereign wealth, private equity and pension funds management.

Opportunities exist for innovative technology providers to enter Europe via London, which is merging as a global leader in Fintech.

Food and agribusiness

Opportunities exist in fresh produce, meat and processed foods. Investment interest and awareness has increased via leading international forums such as the Global Ag Investing Europe (GAIE) conference and successful investments in significant Queensland projects.

The recently published Australian Tax Office farmland register shows 13.6% of Australia’s farmland is foreign-owned with UK-based investors owning the largest proportion with the greatest portion of foreign-owned agricultural land being in Queensland.

Former Commissioner’s intel: How to take your business to Europe & UK

View the videos below, and hear from TIQ’s Former Trade and Investment Commissioner, Ken Smith, as he speaks of the opportunities in Europe & UK .

Ken Smith: Business trends in Europe & UK: Emerging opportunities in the market

Transcript

The big trend or issue that’s emerged in the last 12 months is the decision by the UK government to exit the EU. It’s left another 27 Nation states wondering how the exit is going to occur. It’s opened up some opportunities for Australia to obviously progress free trade agreement with the EU but it’s also opened up an opportunity to progress negotiations with the United Kingdom on a free trade agreement 40 years after they entered the, what was then called, the common market.

So, it’s a big change. It’s an international change because you’re talking about relationships between nations that the EU is the biggest economy in the world. Then you’ve got economies like Germany, which is the fourth biggest in the world; France, which is the sixth biggest in the world; and the UK, which is currently the fifth biggest in the world.

Transcript

Well look, I think the big issue in Europe, seriously, is don’t come over summer. Some countries, as those that travel, within the UK and Europe know that the place really closes down over the summer period. So a large part of July and August is like Australia is from the week before Christmas until Australia Day.

So just think of it like that and plan your travel around times when businesses and people from government will be available.

Transcript

There’s a range of ways that TIQ can assist companies coming into the regional markets that we represent. We’re London based but, in addition to the UK, we go into Europe, in fact, we go down to Turkey and Israel and into Sub-Saharan Africa. The main way, I think, is with market intelligence.
What are the bits of information are important for businesses who might be establishing in Accra, in Capetown or in London or Manchester or in Berlin, for that matter. So, it’s getting that local information. Secondly, it’s getting the contacts. There’s nothing like getting in touch with other Queensland and Australian businesses in that market, to be part of the network.
And I think the other really practical thing we can do is to introduce people to buyers or investors, in those markets from our experience. But the main thing is don’t be afraid to ask to see people because Queenslanders and Australians are highly visible in those markets, and there are a lot of people who will help you establish yourself in Europe and elsewhere.

Transcript

The areas of life sciences in research and development, in advanced manufacturing obviously countries such as the UK, France, Spain, various countries in Scandinavia, Germany obviously, all have significant advanced manufacturing by pharmaceuticals and other R&D activities. There’s a huge potential as part of Advance Queensland for TIQ to work with a range of business, government and industry to progress our R&D, to progress the opportunities for companies to be involved in start up activities.

In R&D for example in the Fin-Tech areas, the financial technology service areas, which has seen Queenslanders win Barclays Techstar Startup Awards and those individuals are working with some of the brightest people across the world to develop systems and technology that will in effect trace some commodities such as gem stones across the world and assist in both the insurance sector and in preventing money laundering through the use of precious gems such as diamonds, rubies, etc.

So these are Queenslanders involved with the cutting edge of world technology and in taking their expertise, working with available finance and taking that to world; and TIQ is very proud to assist all of those people in that work.

Transcript

After the resources boom here with a weakening Australian dollar and a very strong pound sterling, there are great opportunities for both export and inward investments. So let’s think about the agricultural sector. The London Frankfurt link is a very big investor across the world.

There are funds looking for safe investments with good long term returns and so therefore there will be an increasing interest in agriculture investment. Now that’s as a result of what’s happening with the exchange rate, it’s also as a result of significant funding that’s looking for a good and safe sources of investment and we are seeing flows of significant funds coming into agriculture investment.

In the same way, Europe is a very large and established financial center. Almost a half of the world’s foreign exchange dealings occur through London. All of the major sovereign wealth funds, much of the the world pension funds are actually located in London or close to it. It provides a basis for companies looking at various stages of their development to seek funds to enable them to go forward nationally and internationally.

Transcript

I really wanted to be able to provide you with some tips about entering into the markets that I’m responsible for. The UK is a strongly growing economy. It’s second only to the US and was actually a stronger economy than the US in the G7 economies. As an established economy there are incredible links between the UK and Australia.

There are significant business links and it’s about building on those business links. It’s about building on what we can do to take forward that significant investment, that significant two way trade link that has been there for sometime and is still growing. Europe have a number of different markets, it’s emerging from the GFC quite strongly and economies like Spain and Ireland and obviously Germany can provide a base for what we can do to take our businesses to that market.

Overall, the European economies represent a market of 500 million people. They represent opportunities for us to take forward both trade activities but also inward investments and getting investments within our region.

Then to Sub-Saharan Africa, we all know the risks associated with trade work in Sub-Saharan Africa, but within Sub-Saharan Africa there are very strong resource sector.

They have about a third of the world’s natural resources, oil and gas reserves, there are huge agricultural opportunities and obviously a huge population of 1 billion people and growing. The tips that I would give to people in moving into the market really are: make the connections with other businesses, make connections with us who can give you the links to other people within the market, understand the market and understand the competition, understand that this is overall an established market, particularly in the UK and much of Europe, but there are also opportunities in emerging markets – Central Europe and in Sub-Saharan Africa.

Transcript

There’s really value in working with Trade & Investment Queensland, in supporting you in establishing your business. I wouldn’t mind giving you a couple of examples, from the UK just to whet your appetite. We’ve had a very big development of the gas industry within South-West Queensland and Central Queensland.

That growth of LNG involved huge investments by a number of companies. One of them was British Gas. One company that decided to joint venture with a Queensland company here was a large construction company called Murphy’s. Murphy’s created a joint venture here with a Queensland company, Pipe and Civil.

They then moved to take very big contracts particularly from BG but also from Santos and some of the other LNG and gas exporters. When those projects developed, they developed a market here, but the Queensland company now not only operate in Queensland, they operate in Western Australia and they’ve just started to export significantly into the US.

That’s a great example of an inward investment leading to additional export capability from a new sector, a relatively new sector – coal seam methane.

Transcript

TIQ has been very proud to support a number of Queensland companies entering into very competitive markets like the UK. One that I would really like to mention is Ferra Engineering. Ferra Engineering provide and manufacture significant advance componentry for both civil aviation but also military applications.

We’ve worked with Ferra Engineering over the last five years, particularly in the major air shows in the world; that is Paris and Farmborough. They have achieved significant contracts with not only Boeing and Airbus, and recently with GE aviation. They’re a great Queensland success story, advanced manufacturing, taking our product to the world.